Truxton Corporation Reports Third Quarter 2023 Results

October 19, 2023

NASHVILLE, Tenn., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended September 30, 2023. Third quarter net income attributable to common shareholders was $4.6 million or $1.57 per diluted share compared to $4.3 million or $1.49 per diluted share for the same quarter in 2022. Net income and fully diluted earnings per share for the quarter both rose by 5% compared to the third quarter of 2022.

“Truxton’s earnings reached a new quarterly high in the third quarter despite the challenging environment,” said Chairman and CEO Tom Stumb. “While we did benefit from several non-recurring revenue events in the third quarter, our core businesses of banking and wealth management continue to perform well, driven by the value we provide to our clients.”  

Key Highlights

  • Non-interest income grew to $4.9 million in the third quarter, an increase of 3% from the second quarter of 2023 and 16% higher in comparison to the third quarter of 2022. Wealth management services constituted 93% of non-interest income in the third quarter of 2023 compared to 93% in the second quarter of 2023 and 94% in the third quarter of 2022. WMS revenue for the third quarter included one-time fees totaling more than $150 thousand.
  • Gross loans rose by 2% to $642 million at quarter end compared to $628 million on June 30, 2023 and were up 5% compared to $612 million on September 30, 2022.   
  • Total deposits increased by 0.2% from $779 million at June 30, 2023, to $781 million at September 30, 2023, and were 1% lower in comparison to $790 million at September 30, 2022. Truxton continues to principally fund its growth from a single banking location led by its commitment to provide what it believes is superior deposit operations service and technology. As a result, occupancy expenditures and fixed asset investments remain a fraction of typical peers.
  • Net interest margin for the third quarter of 2023 was 2.61%, an increase of 7 basis points from the 2.54% experienced in the quarter ended June 30, 2023, and 34 basis points lower than 2.95% in the quarter ended September 30, 2022. Cost of funds was 3.05% in the third quarter of 2023, up from 2.80% for the quarter ended June 30, 2023, and up from 1.02% for the quarter ended September 30, 2022.  
  • Asset quality remains sound at Truxton. Truxton had no non-performing assets on September 30, 2023. Truxton had $1 thousand of recoveries in the third quarter of 2023 compared to no net charge-offs in the trailing quarter or in the third quarter of 2022.  
  • Truxton adopted the mandated Current Expected Credit Loss accounting methodology for calculating its allowance for credit losses effective January 1, 2023. The Allowance for Credit Losses was $6.0 million at quarter end September 30, 2023, and at quarter end June 30, 2023, each excluding $0.5 million in allowance for unfunded commitments, compared to Allowance for Loan and Lease Losses of $5.8 million at September 30, 2022. For the same three periods, the Bank’s allowance was 0.94%, 0.95%, and 0.94%, respectively, of gross loans outstanding at period end.
  • Truxton Risk Management, Inc., Truxton Corporation’s captive insurance company, ceased further operations in the second quarter of 2023 and was substantively, although not completely, dissolved in the third quarter of 2023, which allowed a one-time reserve release of $168 thousand.
  • The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.36% at September 30, 2023, compared to 10.39% at June 30, 2023, and 9.78% at September 30, 2022. Book value per common share was $27.43, $27.01, and $23.84 at September 30, 2023, June 30, 2023, and September 30, 2022, respectively.
  • During the third quarter of 2023, Truxton Corporation repurchased 12,986 shares of its common stock for $774 thousand, an average price of $59.59 per share. During the nine months ended September 30, 2023, Truxton Corporation paid dividends of $2.14 per common share, inclusive of a $1.00 special cash dividend.

About Truxton
Truxton Trust Company is a provider of wealth, banking, and family office services for wealthy individuals, their families and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX). For more information, visit truxtontrust.com.

Investor RelationsMedia Relations
Austin BranstetterSwan Burrus
615-250-0783615-250-0773
austin.branstetter@truxtontrust.comswan.burrus@truxtontrust.com


Truxton Corporation
Consolidated Balance Sheets
(000's)
(Unaudited)
    
 September 30,
2023*
June 30, 2023*September 30,
2022*
ASSETS   
Cash and due from financial institutions$5,040 $7,060 $5,101 
Interest bearing deposits in other financial institutions 7,589  15,287  3,906 
Federal funds sold 956  1,705  - 
Cash and cash equivalents 13,585  24,052  9,007 
    
Time deposits in other financial institutions 740  1,140  1,830 
Securities available for sale 259,543  272,474  263,149 
    
Gross loans, excluding Paycheck Protection Program 641,697  627,567  611,946 
Allowance for credit losses** (6,031) (5,973) (5,750)
Paycheck Protection Program Loans 69  80  111 
Net loans 635,735  621,674  606,307 
    
Bank owned life insurance 10,751  10,698  10,541 
Restricted equity securities 1,940  2,538  2,688 
Premises and equipment, net 129  143  241 
Accrued interest receivable 4,310  3,945  3,207 
Deferred tax asset, net 7,910  6,793  7,371 
Other assets 13,922  12,414  12,417 
    
Total assets$948,566 $955,870 $916,758 
    
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
Deposits   
Non-interest bearing$116,918 $141,503 $154,049 
Interest bearing$663,950  637,595  635,503 
Total deposits 780,868  779,098  789,552 
    
Federal funds purchased -  -  6,517 
Swap counterparty cash collateral 4,820  3,780  4,000 
Federal Home Loan Bank advances 4,500  16,500  25,500 
Federal Reserve Bank Term Funding Program advances 55,000  55,000  - 
Subordinated debt 14,291  14,946  14,703 
Other liabilities 9,544  7,870  7,619 
Total liabilities 869,023  877,193  847,891 
    
SHAREHOLDERS' EQUITY   
Common stock, $0.10 par value$288 $289 $284 
Additional paid-in capital 31,335  31,743  30,672 
Retained earnings 52,780  53,883  43,748 
Accumulated other comprehensive income (loss) (18,167) (15,989) (18,510)
Net Income$13,307 $8,743 $12,676 
Total shareholders' equity 79,543  78,669  68,870 
    
Total liabilities and shareholders' equity$948,566 $955,863 $916,761 
    
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. The total excludes reserve for credit losses on unfunded commitments recorded in Other liabilities in 2023.


Truxton Corporation
Consolidated Statements of Net Income
(000's)
(Unaudited)
          
 Three Months Ended Year To Date
 September
30, 2023*
 June 30, 2023* September
30, 2022*
 September
30, 2023*
 September
30, 2022*
Non-interest income         
Wealth management services$4,608 $4,442 $4,014 $13,222 $12,251 
Service charges on deposit accounts 123  139  99  398  304 
Securities gains (losses), net 0  0  -  58  (47)
Bank owned life insurance income 54  54  51  159  151 
Other 146  133  103  374  190 
Total non-interest income 4,931  4,769  4,267  14,212  12,849 
          
Interest income         
Loans, including fees$9,714 $9,107 $6,797 $27,308 $17,108 
Taxable securities 2,575  2,267  1,370  6,796  3,627 
Tax-exempt securities 216  217  403  666  1,195 
Interest bearing deposits 69  55  87  185  165 
Federal funds sold 30  18  10  59  14 
 Other interest income 105  134  34  300  97 
Total interest income 12,709  11,798  8,701  35,316  22,206 
          
Interest expense         
Deposits 5,679  4,938  1,914  14,833  3,307 
Short-term borrowings 61  52  6  167  10 
Long-term borrowings 716  817  194  1,769  582 
Subordinated debentures 195  194  23  583  69 
Total interest expense 6,650  6,001  2,137  17,353  3,968 
          
Net interest income 6,059  5,797  6,564  17,963  18,238 
          
Provision for credit losses 6  15  284  81  975 
          
Net interest income after provision for loan losses 6,053  5,782  6,280  17,882  17,263 
          
Total revenue, net 10,984  10,550  10,547  32,094  30,112 
          
Non interest expense         
Salaries and employee benefits 3,819  3,663  3,784  11,247  10,764 
Occupancy 313  314  261  913  756 
Furniture and equipment 7  20  25  52  87 
Data processing 470  455  367  1,352  1,086 
Wealth management processing fees 178  176  163  530  487 
Advertising and public relations 58  35  30  139  84 
Professional services 127  54  271  297  616 
FDIC insurance assessments 85  75  77  235  191 
Other 256  279  228  932  682 
Total non interest expense 5,314  5,070  5,206  15,698  14,753 
          
Income before income taxes 5,670  5,481  5,341  16,396  15,359 
          
Income tax expense 1,109  1,028  1,002  3,089  2,683 
          
Net income$4,560 $4,453 $4,339 $13,307 $12,676 
          
Earnings per share:         
Basic$1.57 $1.53 $1.50 $4.58 $4.37 
Diluted$1.57 $1.53 $1.49 $4.57 $4.35 
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.    


Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000's)
(Unaudited)
    
 September 30, 2023*June 30, 2023*September 30, 2022*
    
Per Common Share Data   
Net income attributable to shareholders, per share   
Basic$1.57$1.53$1.50
Diluted$1.57$1.53$1.49
Book value per common share$27.43$27.01$23.84
Tangible book value per common share$27.43$27.01$23.84
Basic weighted average common shares2,829,1392,830,8942,811,768
Diluted weighted average common shares2,836,1872,838,3212,825,084
Common shares outstanding at period end2,900,1712,912,7812,888,567
    
    
Selected Balance Sheet Data   
Tangible common equity (TCE) ratio8.39%8.23%7.51%
Average Loans$634,179$629,899$589,142
Average earning assets (1)$943,585$932,732$898,926
Average total assets$949,755$939,007$908,753
Average shareholders' equity$80,535$76,536$72,918
    
    
Selected Asset Quality Measures   
Nonaccrual loans$0$0$0
90+ days past due still accruing$0$0$0
Total nonperforming loans$0$0$0
Total nonperforming assets$0$0$0
Net charge offs (recoveries)($1)$0$0
Nonperforming loans to assets0.00%0.00%0.00%
Nonperforming assets to total assets0.00%0.00%0.00%
Nonperforming assets to total loans and other real estate0.00%0.00%0.00%
Allowance for credit losses to total loans**0.94%0.95%0.94%
Net charge offs to average loans-0.00%0.00%0.00%
    
    
Capital Ratios (Bank Subsidiary Only)   
Tier 1 leverage10.36%10.39%9.78%
Common equity tier 114.11%14.25%12.64%
Total risk-based capital15.04%15.18%13.46%
    
Selected Performance Ratios    
Efficiency ratio47.87%48.56%45.85%
Return on average assets (ROA)1.91%1.89%1.89%
Return on average shareholders' equity (ROE)22.48%23.33%23.61%
Return on average tangible common equity (ROTCE)22.48%23.33%23.61%
Net interest margin2.61%2.54%2.95%
    
*The information is preliminary, unaudited and based on company data available at the time of presentation.
**2022 data shows Allowance for loan losses. Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. 2023 ratios do not include reserve for unfunded commitments
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, and investment securities.


Truxton Corporation 
Yield Tables 
For The Periods Indicated 
(000's) 
(Unaudited) 
             
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below: 
                      
 Three Months Ended Three Months Ended Three Months Ended 
 September, 30 2023* June 30, 2023* September 30, 2022* 
             
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
 
             
Earning Assets            
   Loans$634,179 6.01$9,602 $629,899 5.72$8,989 $589,142 4.50$6,680 
   Loan fees$0 0.07$112 $0 0.08$119 $0 0.08$117 
      Loans with fees 634,180 6.08$9,714 $629,899 5.80$9,107 $589,142 4.58$6,797 
   Mortgage loans held for sale$0 0.00$0 $0 0.00$0 $0 0.00$0 
   Federal funds sold$2,293 5.20$30 $1,456 4.85$18 $1,722 2.22$10 
   Deposits with banks$13,213 5.34$178 $15,618 4.95$193 $14,641 2.35$87 
   Investment securities - taxable$255,822 4.03$2,575 $247,515 3.66$2,267 $227,715 2.41$1,370 
   Investment securities - tax-exempt$38,077 3.38$216 $38,243 3.39$217 $65,706 3.31$402 
      Total Earning Assets$943,585 5.40$12,713 $932,732 5.12$11,802 $898,926 3.89$8,666 
Non interest earning assets            
   Allowance for loan losses (5,989)     (5,959)     (5,592)    
   Cash and due from banks$5,814    $6,092    $7,018    
   Premises and equipment$134    $164    $236    
   Accrued interest receivable$3,443    $3,213    $2,526    
   Other real estate$0    $0    $0    
   Other assets$29,298    $28,375    $26,238    
   Unrealized gain (loss) on inv. securities (26,530)     (25,610)     (20,599)    
      Total Assets$949,755    $939,007    $908,753    
Interest bearing liabilities            
   Interest bearing demand$354,018 3.43$3,062 $341,780 3.14$2,673 $358,489 0.20$18 
   Savings and money market$132,842 2.67$895 $139,463 2.62$912 $133,119 4.36$1,463 
   Time deposits - retail$17,334 2.67$117 $16,758 2.40$100 $24,663 1.14$71 
   Time deposits - wholesale$147,046 4.33$1,605 $128,795 3.90$1,254 $107,704 1.34$363 
      Total interest bearing deposits$651,240 3.46$5,679 $626,796 3.16$4,938 $623,975 1.22$1,915 
   Federal Home Loan Bank advances$9,337 3.79$91 $18,907 4.27$204 $5,283 1.69$23 
   Subordinated debt$15,030 5.09$195,399 $14,876 5.16$193,899 $14,943 5.07$194 
   Other borrowings$60,606 4.40$877 $58,342 5.86$858 $1,213 2.70$5 
      Total borrowed funds$84,973 4.46$968 $92,125 4.56$1,062 $21,439 4.06$222 
      Total interest bearing liabilities$736,213 3.57$6,647 $718,921 3.34$6,000 $645,414 1.31$2,137 
Net interest rate spread 1.83$6,067  1.78$5,801  2.58$6,529 
   Non-interest bearing deposits$127,389    $139,807    $185,567    
   Other liabilities$5,308    $3,743    $4,854    
   Shareholder's equity$80,535    $76,536    $72,918    
      Total Liabilities and Shareholder's Equity$949,445    $939,007    $908,753    
Cost of funds 3.05   2.80   1.02  
Net interest margin 2.61   2.54   2.95  
             
*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.   
             
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category. 
                      


Truxton Corporation 
Yield Tables 
For The Periods Indicated 
(000's) 
(Unaudited) 
The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below: 
                 
 Nine Months Ended  Nine Months Ended  
 September 30, 2023*  September 30, 2022*  
 Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
  Average
Balances
Rates/
Yields
(%)
Interest
Income/
Expense
  
           
Earning Assets          
   Loans$628,742 5.73$26,967  $544,462 4.07$16,565  
   Loan fees$0 0.07$342  $0 0.14$551  
      Loans with fees$628,742 5.81$27,309  $544,462 4.20$17,116  
   Mortgage loans held for sale$0 0.00$0  $38 4.12$1  
   Federal funds sold$1,544 5.08$59  $1,904 0.95$14  
   Deposits with banks$13,532 4.91$497  $25,553 0.87$165  
   Investment securities - taxable$247,046 3.67$6,796  $234,000 2.07$3,627  
   Investment securities - tax-exempt$38,890 3.41$666  $65,961 3.26$1,195  
      Total Earning Assets$929,754 5.12$35,327  $871,918 3.45$22,118  
Non interest earning assets          
   Allowance for loan losses (6,075)      (5,161)     
   Cash and due from banks$6,148     $8,099     
   Premises and equipment$167     $260     
   Accrued interest receivable$3,169     $2,291     
   Other real estate$0     $0     
   Other assets$28,760     $23,710     
   Unrealized gain (loss) on inv. securities (26,074)      (12,538)     
      Total Assets$935,849     $888,579     
Interest bearing liabilities          
   Interest bearing demand$353,974 3.12$8,263  $362,327 0.03$90  
   Savings and Money Market$133,262 2.35$2,341  $144,003 2.40$2,580  
   Time deposits - Retail$17,446 2.33$304  $17,317 0.92$119  
   Time Deposits - Wholesale$136,564 3.84$3,926  $76,873 0.90$518  
      Total interest bearing deposits$641,247 3.09$14,833  $600,520 0.74$3,307  
   Federal home Loan Bank advances$15,002 4.1$467  $5,350 1.69$69  
   Subordinated debt$14,969 5.14$583  $14,861 5.16$582  
   Other borrowings$43,646 4.44$2,052  $1,112 2.31$10  
      Total borrowed funds$73,617 4.51$2,519  $21,323 4.09$661  
      Total interest bearing liabilities$714,864 3.24$17,353  $621,843 0.85$3,968  
Net interest rate spread 1.89$17,975   2.60$18,150  
   Non-interest bearing deposits$139,068     $186,398     
   Other liabilities$4,251     $4,002     
   Shareholder's equity$77,561     $76,336     
      Total Liabilities and Shareholder's Equity$935,744     $888,579     
Cost of funds 2.71    0.65   
Net interest margin 2.63    2.85   
           
*The information is preliminary, unaudited and based on company data available at the time of presentation.    
           
Yield Table Assumptions - Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.